(Whitehorse, Yukon) While exploration and mining companies gather in Whitehorse to promote mining at the Geoscience Forum and Tradeshow, the Yukon Conservation Society is saying that over 8,400 Yukon mining claims are practically worthless.
The publicly traded companies with mining claims in the Peel watershed have written off almost all of their expenses for these claims. Of $168,431,781 spent by these companies in the Peel since 2005, all but $5,772,274 has been written off.
YCS commissioned a report from Ramsey Hart, Canada Program Coordinator of MiningWatch Canada, to explain the significance of these write-offs, and to examine the status and potential market value of the Peel claims.
“In their financial statements most exploration companies list their property acquisition and exploration expenses as assets,” said Ramsey Hart. “This is done on the assumption that mineral rights and information gained for the property are of equal value to the cost of obtaining them. Typically companies carry a property as an asset until it becomes clear it has little potential, at which point it is written off. Companies write off their expenses when they recognize that there is no viable deposit and/or they do not intend to proceed with additional work on the property.”
The Peel planning process and the controversy over the future of the Peel watershed do not appear to be a factor in the write-offs. Instead, Hart attributes the write-offs to the global financial situation and the downturn in mineral prices.
“Year-end filings of three companies with substantial claims in the Peel (Cash/Pitchblack, Mega Uranium and Zinccorp) yielded not a single mention of the Peel land use planning process,” said Hart. “Mining companies listed on the TSX and TSX-V are required by law to disclose materially important information to their shareholders through public filings – they are required to disclose any factors that could affect up to 10% of the value of the company. The fact that these companies did not mention the Peel planning process in their filings indicates that the planning process has not significantly affected their value.”
“Yukon government has been using the potential cost of compensating holders of mining claims in the Peel as an excuse not to implement the Peel Planning Commission’s Final Recommended Plan,” said YCS Executive Director Karen Baltgailis. “But the companies’ own records show that they are practically worthless. If these claims weren’t being renewed for free by Yukon government during the staking moratorium in the Peel, they would almost certainly have long since lapsed. The Peel watershed as intact wilderness is priceless –Yukon government needs to stop using worthless mining claims as an excuse not to protect the Peel.”
Karen Baltgailis, Executive Director, Yukon Conservation Society (867) 668-5678
Ramsey Hart, Canada Coordinator, MiningWatch Canada (613) 569-3439